Will Nation States Reassert Their Sovereignty over the Platform Economy?

Abstract

Aware of the power of platform firms and the risks of the platform economy, governments are reconsidering the dominant laissez faire approach in favor of strategies that regulate the power of platform firms. While transnational dynamics play an important role in shaping these emerging regimes, we argue that they are also influenced by three factors that operate primarily at domestic level: the agency of platform firms, the impact of first-mover US platforms, and domestic politics. We illustrate our approach through an analysis of the trajectories and regulatory measures of four large economies: the US, the EU, China, and India.

As efforts to govern the platform economy expand to emerging technologies such as AI, our analysis presages broader changes to the structure of what was with a few very important exceptions, a relatively borderless global online economy.